I think stretchwithme is actually fairly accurate in his portrayal of the tragedy of the commons. The key is the externalities must be internalized.
The problem arises where "privatization" is floated as the answer to a resource overconsumption situation, but where the property boundaries of what is privatized don't encompass the entire set of externalities. You nail this in your criticism of the hypothetical WalMart sale of Yellowstone: "Wal-mart has no special interest in preserving it as a common good." If that's the case, then what was privatized isn't the full set of externalities. And that's where Hardin's tidy solution starts getting messy.
If you're familiar with his works, you'll also note that a second essay of his addresses another challenge: "lifeboat ethics". While privatizing a commons (properly) can address the economic inefficiencies of privatized gains and socialized costs (banking, anyone), what it cannot do is fundamentally increase the carrying capacity of a resource beyond its absolute limits. Yes, it's possibly that privatization might lead to technical optimization, but some limits remain. And ultimately, the ability to provide for people (and ecosystems) has bounds.
There's also the challenge of properly valuing a resource over time, and that's a place where any market solution seems fundamentally limited, at least as presently implemented.
The future value of a resource is reflected in its resale value. Most people don't destroy their homes because they hope to resell them.
Of course, some resources have value simply because they exist. And nobody pays for the privilege of knowing or looking at them. A body of water provides such value to everybody that can look out the window at it.
If we did have ways to "own" the view, better decisions could be made about conflicting potential uses.
Whats clear to me is that deciding these things politically doesn't work well a lot of the time, especially in a system where lobbyists have so much influence.
The future value of a resource is reflected in its resale value.
No: the market's present assessment of an asset's future value with relation to the present state of the market is what its (re)sale price shows.
There is a difference between "price" and "value", and it's a long, long discussion. Smith reflects on it at length in Wealth of Nations, particularly the distinction between the "natural" and "market" prices of commodities: http://www.gutenberg.org/files/3300/3300-h/3300-h.htm#link2H...
The longer discussion involves much of what is now called economic discourse prior to Smith, see generally Backhouse, The Ordinary Business of Lifehttp://www.powells.com/biblio/62-9780691116297-1
In particular, the market can grossly overvalue items (bubbles), and it can put premiums on present consumption during times of crisis (e.g., burning books or artworks for their heat value in wartime).
And there are goods of immense value for which no or limited markets exist: air and water, in general (assuming you can capture these from the skies or collect them from the land).
I wanted to make explicit the distinction between "value" which can denote a range of concepts, and "price" which specifically refers to a sum of money. Since value itself is at question here.
Though yes, "market value" generally equates to "market price". And the pedants will note that "price" needn't be strictly limited to monetary assessments, though that's how I'm using the term here.
The problem arises where "privatization" is floated as the answer to a resource overconsumption situation, but where the property boundaries of what is privatized don't encompass the entire set of externalities. You nail this in your criticism of the hypothetical WalMart sale of Yellowstone: "Wal-mart has no special interest in preserving it as a common good." If that's the case, then what was privatized isn't the full set of externalities. And that's where Hardin's tidy solution starts getting messy.
If you're familiar with his works, you'll also note that a second essay of his addresses another challenge: "lifeboat ethics". While privatizing a commons (properly) can address the economic inefficiencies of privatized gains and socialized costs (banking, anyone), what it cannot do is fundamentally increase the carrying capacity of a resource beyond its absolute limits. Yes, it's possibly that privatization might lead to technical optimization, but some limits remain. And ultimately, the ability to provide for people (and ecosystems) has bounds.
There's also the challenge of properly valuing a resource over time, and that's a place where any market solution seems fundamentally limited, at least as presently implemented.